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Credit Suisse strategist Zoltan Pozsar says China's central bank is well placed to backstop a global commodities crisis triggered by sanctions over Russia's invasion of Ukraine. He suggests this could pave the way for a much stronger yuan.
A commodities crisis tied to sanctions would raise feed input costs globally, and a stronger yuan would change China's buying power for dollar-priced grains and meal.
reuters.comMar 8, 2022After 10 past bearish geopolitics events, Chinese Yuan (CNY per USD) moved a median -0.3% over 5 sessions (40% higher; middle half -0.5% to +0.2%), and -0.8% over 20.
After 323 past bullish geopolitics events, Corn moved a median +0.5% over 5 sessions (57% higher; middle half -1.5% to +2.9%), and +0.9% over 20.
After 72 past bullish geopolitics events, Soybeans moved a median +0.4% over 5 sessions (60% higher; middle half -1.0% to +2.5%), and -1.0% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
